It comes in the wake of CME’s announcement that it will launch Bitcoin trading soon, and Square revealing it will pilot Bitcoin sales via its Square Cash app.

And it’s for these reasons that one research firm believes Bitcoin’s success has only just started.

Bitcoin value over the course of November (Picture: coindesk.com)

What is Bitcoin?

Bitcoin is a decentralized digital currency, meaning neither does it exist in the physical world, nor does it have a central bank such as the Federal Reserve. There are also a finite number of bitcoins in the world, according to Bitcoin.org.

Only 21 million bitcoins exist but this is not seen as a limitation because bitcoins can be broken down into smaller sub-units of bits with 1,000,000 bits in 1 bitcoin. Bitcoins can be divided up to 8 decimal places (0.000 000 01) and potentially even smaller units.

Ronnie Moas, founder of Standpoint Research, wrote in a report to clients earlier this month: ‘There have been many positive developments during the last five months and a few of the obstacles that were in Bitcoin’s way have been knocked down.

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‘An argument can be made that the good news is still not fully reflected in the current price.’

They believe the price for Bitcoin is set to surge to $14,000 in 2018.

Bitcoin was introduced in 2009 by a mysterious programmer known only as Satoshi Nakamoto, which is thought to be a pseudonym, and who has never given an interview. Previously the domain of technology-friendly libertarians, bitcoin has shot to mainstream financial attention after its value increased by up to 1,000 per cent since the start of the year.

The rise of bitcoin also coincided with the tipping point of the financial crisis in Cyprus, when it was announced individual savers faced a one-off levy in order for a eurozone bailout to go ahead. In light of governments raiding savings in this way, the prospect of a currency free from government regulation and interference suddenly becomes much more enticing. However, the US Treasury has previously made moves to apply laundering rules to virtual currencies such as bitcoin.

Buying Bitcoin appears to be pretty straight forward. The first step is to visit bitcoin.org and download a virtual wallet.

From there, you will be offered links to various websites where payments can be made for the currency, a lot like torrent websites which allow you to download music and movies.